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11:10 - 11:35 Joe DeweyDrew Saito

 

Community Banks & Blockchain - Overcoming Barriers of Entry

 

Joe Dewey
Financial Services and Real Estate Partner, Holland & Knight

Drew Saito
Senior Vice President, First Green Bank

 

Session Description

For decades, community banks have coexisted with larger national and global banks, including the period of significant consolidation during last thirty years.  This status que is under threat as the pace of innovation and technology are all but certain to result in transformative effects in banking—in contrast to the incremental change experienced over the last several decades.  Unless community banks can keep pace, many risk having a significantly higher cost structure than their larger counterparts.  This in turn risks creating a large class of small banks with an uncompetitive business model—one already strained by a higher cost of capital.  The disparity is becoming particularly acute in two areas: (i) the area of compliance, where large institutions are using distributed ledger technology (“DLT”) and statistical learning models, rather than more expensive human capital, to improve compliance, and (ii) the migration from a paper-based system of trade finance to a digital ecosystem that manages the lifecycle of letters of credit and documents of title by leveraging DLT.

The panel will discuss: why this period of innovation is different from past periods; why community banks are not participating this time around; whether this trend can be reversed; with whom community banks can partner to overcome the barriers of entry associated with the development of DLT; and the proper role of regulators and policy makers to address the growing disparity

 


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